In accordance with Circular No. DNBS (PD-SC/RC). CC. No. 23/26.03.001/2010-11 dated November 25, 2010, regarding the submission of information to Credit Information Companies (CICs), Asset Reconstruction Companies (ARCs) are required to be members of at least one CIC. To enhance alignment with the guidelines for banks and Non-Banking Financial Companies (NBFCs) and to ensure comprehensive tracking of borrowers' credit histories post the transfer of loans from banks and NBFCs to ARCs, the guidelines have been revised.
Under the new guidelines, ARCs must become members of all CICs and provide the necessary data in accordance with the Uniform Credit Reporting Format set forth by the Reserve Bank of India (RBI), as amended periodically. Furthermore, ARCs are mandated to keep the information they collect and maintain up-to-date on a fortnightly basis or at shorter intervals as mutually agreed with the CIC, adhering to the regulations stipulated in the Credit Information Companies Regulations, 2006.
In instances of rejected data, ARCs are required to rectify such information and upload the corrected data to the CIC within seven days of receiving the rejection notice. ARCs should also adopt best practices by implementing a standard operating procedure (SOP) for CIC-related activities, ensuring that customer information is accurately reported and updated regularly. Key practices include appointing a nodal officer for CIC interactions, prioritizing customer grievance redressal, integrating grievance resolution with existing systems, and complying with the timelines set forth in the Credit Information Companies (Regulation) Act (CICRA) and associated rules.
This circular has been issued under the powers conferred by Section 12 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The guidelines apply to all ARCs, which are expected to establish the necessary systems and processes to ensure compliance by January 1, 2025.
Comments